President Donald Trump and his Chinese counterpart Xi Jinping inaugurated a two-day bilateral summit in Beijing on Thursday. Both parties agreed that the Strait of Hormuz must remain open to the free flow of energy, and Xi expressed interest in increasing Chinese purchases of US oil to reduce Beijing's dependence on the strait. They also discussed the establishment of a trade committee and an investment committee to strengthen ties between both economies, as well as increasing purchases of agricultural products. The issue generating the most concern after the first day of the summit is Taiwan, where the Chinese president warned Trump that it is the most important issue in the bilateral relationship and that, if not handled properly, it would take the relationship to a "dangerous" place.

Our Take

We do not expect the Trump-Xi meeting to lead to major advances in US-China relations, any agreements would at best be symbolic. Financial markets would like to know whether the summit will lead the Asian giant to help pressure Tehran to open Hormuz. China is the largest buyer of Iranian oil and one of the few actors with real capacity to influence the Iranian regime.

The US Senate confirmed Kevin Warsh yesterday as the new Federal Reserve Chair. Warsh succeeds Jerome Powell, whose term as chair concludes tomorrow Friday, though he will remain as a Board Governor for an additional period. The first FOMC meeting under Warsh's leadership is scheduled for June 16 and 17. Warsh has proposed reducing the Fed's $6.7 trillion balance sheet, coordinating more closely with the Treasury, reducing the number of Fed meetings per year, and limiting forward policy signal communication, changes that together would point toward a less predictable and more discreet Fed.

Our Take

Kevin Warsh's arrival at the Fed presidency is one of the most consequential events for global financial markets. President Trump has been explicit in his expectation that Warsh cut interest rates. However, the new president inherits a Fed with 3.8% inflation and an accelerating PPI, which has increased speculation among traders that the central bank's next move should actually be a rate hike.

US initial jobless claims rose by 11,000 to 210,000, which despite reaching their highest level in three weeks remains at low levels. The four-week moving average stood at 203,750, an increase of 7,500 compared to the prior revised week's average. On continuing claims, seasonally adjusted continuing claims totaled 1,782,000, an increase of 24,000 from the prior week.

Our Take

The US labor market maintains a condition of few layoffs but also few hires. The low levels of initial jobless claims reflect more the reluctance of companies to lay off workers in an uncertain environment than robust labor demand.

The UK economy grew 0.6% in Q1 2026, in line with market forecasts and above the revised advance of 0.2% recorded in the last quarter of 2025, according to preliminary data published Thursday by the Office for National Statistics (ONS). The expansion was driven primarily by the services sector, while industrial production also advanced slightly and construction returned to positive territory. On an annual basis, the increase was 1.1% (+0.8% in Q4 2025).

Our Take

The figures still reflect a period prior to the deterioration caused by the war between the United States and Iran, a conflict that has strained global energy supply chains following the effective closure of the Strait of Hormuz. Additionally, since 2022, the UK economy has tended to show particularly strong growth in the first quarter before losing momentum during the rest of the year, which could be due to seasonal adjustment issues in official statistics.

Corporate News

Vesta set the price of its global public share offering at US$34.62 per ADS in the US and 59.50 pesos per share in Mexico, with the close of the transaction expected on May 18. The net proceeds will be used to finance the company's growth strategy.

Cisco reported results that beat consensus estimates with guidance for the current quarter significantly above expectations, driven by demand for its network infrastructure for AI data centers. The company has spent the past two years transforming its portfolio from traditional network hardware toward security software and connectivity platforms for AI infrastructure, and the quarter's numbers suggest that transformation is beginning to generate measurable returns. Cisco's rally dragged up Hewlett Packard Enterprise (+4.2%), Arista Networks (+1.7%), Nokia (+3.5%), and Ericsson (+1.9%).

Cerebras Systems completed its IPO at US$185 per share, well above the initial range of US$115–125, reaching a market valuation of approximately US$40 billion. Cerebras' IPO is the largest in the US so far this year and sets the precedent for the next listings in the sector, including the eventual IPO of SpaceX.

The three largest US telecommunications operators (AT&T, T-Mobile, and Verizon) announced an agreement to create a joint venture that will use direct-to-device satellite technology to eliminate dead zones in the US, including rural and remote areas. The initiative combines the spectrum resources of the three operators with satellite technology to offer continuous connectivity in areas where terrestrial networks have limited or no coverage. The transaction is subject to the signing of definitive agreements and regulatory approvals.

The to-do list

Today's quote…

"The moment you start believing you know exactly what is going to happen is the moment the market teaches you that you don't."

— Howard Marks, Oaktree Capital